LCQ10: Measures to relieve unemployment in the construction industry

Following is a question by the Hon Abraham Shek and a written reply by the Secretary for Development, Mrs Carrie Lam, in the Legislative Council today (April 29):


It is learnt that around 20% of the private development projects in Hong Kong have been shelved since the onset of the financial tsunami in September last year, resulting in a large number of construction workers losing employment.  The latest seasonally-adjusted unemployment rate of the construction industry has reached a 33-month high of 11.2%.  Moreover, as there is still some time before the construction works of various major infrastructure projects commence, such projects cannot provide immediate relief to the serious unemployment problem in the construction industry.  In this connection, will the Government inform this Council:

(a)  whether it has compiled statistics on the number of Hong Kong residents who used to work in the construction sector in other places such as Macao, the Middle East and Dubai and have returned to reside in Hong Kong after losing their jobs, since September last year; if so, of the number of such people; if not, the reasons for that;

(b)  what medium-term measures the Government will introduce to lower the continuously increasing unemployment rate of the construction industry;

(c)  as some members of the construction industry have pointed out that the major infrastructure projects do not have high demand for workers of certain trades in the industry, such as steel bending and fitting-out, while nearly 20% of the Hong Kong workers who were dismissed due to the suspension of the casino projects in Macao are engaged in these trades, what corresponding measures the Government will introduce to assist such workers; whether the authorities will consider providing training and subsidies to assist them in switching occupation; if they will, of the details; if not, the reasons for that; and

(d)  whether it knows the progress of the various building maintenance support schemes launched respectively by the Urban Renewal Authority and the Hong Kong Housing Society; what new measures will be introduced to expedite and facilitate the implementation of building maintenance works so as to create more job opportunities for construction workers?



The Government has been closely monitoring the impact of the financial tsunami on the construction industry, and has been implementing infrastructure projects of large, medium and small scales in full swing to create job opportunities.  We will stay in touch with various stakeholders of the construction industry, including contractors, consultants, professional bodies and trade unions, to effectively resolve the problems faced by the industry, so that construction will commence early and employment opportunities will increase.

My reply to the four-part question is as follows:

(a)  By making reference to statistics on non-resident workers of the Labour Affairs Bureau of the Macao Special Administrative Region, we estimate that some 5,000 Hong Kong construction workers returned from Macao in the period from September 2008 to February 2009.  As for the number of Hong Kong construction workers who used to work in other places such as the Middle East (including Dubai) but have returned to Hong Kong due to suspension of the overseas projects, we are unable to get hold of the information.  Another figure available for reference is the total of about 16,000 construction workers who first registered with the Construction Workers Registration Authority in the above same period.  As the registration system has been implemented since September 2007, the above figure may be able to reflect the situation of new entrants or returned workers.

(b)  The Government has been pressing ahead with construction projects of various sizes, as reflected by the increase of annual expenditure in capital works projects from $20.5 billion in 2007-08 to $23 billion and $39.3 billion in the 2008-09 and 2009-10 financial years respectively.  Funding applications for a total of 99 projects worth $26.2 billion and 82 projects worth $47.1 billion were approved in the 2006/07 and 2007/08 legislative sessions respectively.  In the current 2009/10 legislative session, we expect that funding applications for about 100 projects worth more than $100 billion will be submitted to the Legislative Council for approval.  In other words, a total of about 280 new capital works projects worth more than $170 billion have been added for the three legislative sessions.  These works projects are being implemented in different stages.  We estimate that about 47,100 job opportunities will be provided in 2009-10, representing an increase of 11,800 jobs over 2008-09.  This will benefit substantially the employment situation of the construction industry.

Separately, we have taken measures on the following three fronts to bolster our efforts in "preserving jobs" for the construction industry:

(i)  The Government, in collaboration with the Hong Kong Housing Society (HKHS) and the Urban Renewal Authority (URA), will launch a $1-billion "Operation Building Bright" (the Operation) for a period of two years.  We estimate that the Operation will create about 10,000 job opportunities for fitting-out and maintenance workers as well as related professionals and technicians over the next two years.

(ii)  The block allocations on minor works will increase by 25% from $6.9 billion in 2008-09 to $8.6 billion in 2009-10.  These minor works include environmental protection and "green" building works to upgrade the energy efficiency of government buildings, as well as construction of green roofs, installation of energy efficient lighting systems, and retrofitting plumbing appurtenance with water saving devices, energy efficient air-conditioning, lift and escalator systems in government buildings.  These types of works will instantly create more jobs in the construction sector.

(iii)  The Buildings Department (BD) has conducted a special territory-wide operation since March 2009 to remove some 5,000 additional abandoned signboards within 12 months.  We expect that the operation will create about 170 job opportunities for the construction industry.  It will also enhance public safety and improve the cityscape.

(c)  Building construction projects have a relatively high demand for workers of steel bending and fitting-out trades.  Among some 100 projects to be submitted to the Public Works Sub-Committee for approval in the current 2009/10 legislative session, the Architectural Services Department will be involved in 40 projects, accounting for 40% of the total.  Coupled with the block allocations on minor building works, the Government's estimated expenditure in major and minor building works will reach $14.2 billion in 2009-10, representing a significant increase of some $3.4 billion or 30% over the expenditure of $10.8 billion in 2008-09.  The major building projects at construction peak this year include the Tamar development project, Prince of Wales Hospital’s extension block, redevelopment of the Lo Wu Correctional Institution, construction of a new campus for the Vocational Training Council at Tiu Keng Leng, Customs Headquarters Building as well as a number of university campus expansion projects for the implementation of the Academic Structure for Senior Secondary Education and Higher Education.  We believe that these construction projects can partly make up for the reduction in private development projects and provide timely job opportunities for construction workers who have returned from Macao and other places.

While the Government is actively creating more job opportunities, the Construction Industry Council and its Training Academy has made special arrangements to meet the needs of those unemployed construction workers who intend to shift to other trades within the construction industry.  Various training programmes have been organised to help them acquire new skills and shift to other trades, so that they can rejoin the construction industry by grasping the job opportunities brought about by various major infrastructure projects and building maintenance works.  The training programmes to be launched by the Training Academy in the near future include courses on building repair and maintenance as well as timber formwork in civil engineering work.

(d)  Since 2004, the URA has successively launched the "Building Rehabilitation Materials Incentive Scheme" and the "Building Rehabilitation Loan Scheme".  As at March 2009, rehabilitation works for 490 buildings were completed or in progress, while 38 buildings were being invited to join the two Schemes.  Since their inception, the two Schemes have provided rehabilitation incentive materials worth some $40 million as well as subsidies and loans of about $200 million.

Since February 2005, the HKHS has launched the "Building Management and Maintenance Schemes".  As at March 31, 2009, the HKHS provided subsidies and technical support to some 3,870 buildings, including successfully assisting 905 buildings in setting up owners' corporations (OCs) as well as approving 810 applications for subsidies of some $180 million under the "Building Maintenance Incentive Scheme".  Separately, the HKHS has approved 790 applications involving a sum of about $30 million under the "Home Renovation Loan Scheme".  In May 2008, the Government entrusted the HKHS to implement the "Building Maintenance Grant Scheme for Elderly Owners".  So far, about 2,850 applications for repair grants for elders of about $65 million have been approved.

As a specific measure for "Preserving Jobs", the Financial Secretary announced in the 2009-10 Budget Speech that the Government would, in collaboration with the HKHS and URA, launch a $1-billion "Operation Building Bright" for a period of two years to provide subsidies and one-stop technical assistance to help owners of about 1,000 old buildings carry out repair works.  The Operation will create a large number of job opportunities for the construction industry within a short period of time.  This will achieve the dual objectives of alleviating the relatively high unemployment rate in the industry as well as enhancing building safety and improving the cityscape.

The HKHS and URA will provide concerned owners with technical advice and support to assist them in carrying out voluntary repair and maintenance works.  The two agencies will also be responsible for the administration of the Operation, monitoring the progress of repair and maintenance works as well as disbursement of subsidies to the OCs.  Regarding buildings having difficulties in co-ordinating repair works, such as buildings without OCs, the BD will get directly involved by serving statutory repair orders.  If the orders are not complied with, the BD will arrange consultants and contractors to carry out repair works, and recover the costs from the owners after deducting the subsidies they are eligible for under the Operation.

With the funding approval from the Finance Committee of the Legislative Council on April 24, 2009, the Operation will be implemented in May 2009.

Ends/Wednesday, April 29, 2009
Issued at HKT 15:25